World Bank warns South Sudan over debt

April 26, 2007 (KHARTOUM) – The World Bank head in South Sudan, Surendra Agarwal, has advised the Government of Southern Sudan to be “cautious about how they take on debts, and the conditions on those debts”.

The World Bank official was reacting to unconfirmed reports of major new borrowing to cover holes in the 2007 budget revealed Friday 20 April.

The Acting Minister of Finance, Gabriel Changson Chang has disclosed unconfirmed reports from the World Bank that GOSS is planning to borrow up to $550m. It is thought that the lenders could include China and United Arab Emirates, as well as the possible World Bank lending already reported by Changson Chang.

The Minister refused to confirm or deny the new reports.

On Friday, Changson Chang told a press conference in Juba that the overall level of oil revenues is a third lower than expected.

He said under the approved budget for this year the government had estimated $900 million U.S. from oil money. However, Chang said oil revenues received so far indicate the government is likely to receive only about 67 percent of that budget
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Minister of Information Samson Kwaje said that 70 percent of the government budget goes on salaries, which leaves very little room to lower the budget to accommodate less revenue, without laying off workers.

Chang told Sudan Radio Service that he is talking with the World Bank about the possibility of a loan to cover the budget shortfall.

The South Sudan Ministry of Finance has unfrozen the GOSS bank accounts after corruption allegations.

(ST)